Barnes & Noble's Nook – Changes Required

The Nook isn’t performing very well. Changes are needed.

According to reports this week, Barnes & Noble is not going to manufacture any more of its tablets, known as the Nook. However, reports say they still want to produce the tablet, just not make it themselves. A statement summarizes their plans on it.

“We want to move away from taking on all that risk ourselves,” Barnes & Noble Chief Executive William Lynch told investors on a call. “It was very capital intensive to build our own tablets.”

So, if the plan is not to completely abandon the Nook, Barnes & Noble might consider abandoning its current strategy for it. It should spin off the Nook as a separate company. It should re-brand it to start fresh. The branding should include establishing a clear niche it can hold on to. And, it might even consider a bold move of using an entirely different operating system. Let’s dissect.

Spin It
Today, the Nook has too much negative baggage in being associated with Barnes & Noble. It should spin off the company into a dedicated tablet provider. Let’s face it, the future of the book seller isn’t looking too grand either. Having a dedicated tablet company will offer a new opportunity for both. The Nook should be made a different company with a new company and product name. Start fresh. Sure, it can still leverage content from Barnes & Noble but, it should position the relationship as purely a partnership for content. Of course the informed will know who’s behind it. Barnes & Noble might turn to how Hyundai has successfully branded the Kia as a case study. Most folks still know a Kia is made by Hyundai. And there was a time when Hyundai was perceived as the auto king of junk. But today these are distant memories. The two brands have been well positioned as lower entry quality cars. While the Kia is often known to be made by Hyundai, consumers today seemingly look past that, and the history – and it’s working.

Niche It
Hyundai found a nice niche for its brand and the Kia – the Kia is arguably perceived to be the slightly sportier of the two. Barnes & Noble must do the same for the Nook. It must make a Kia out of it. Start with a new name and run the organizations separately. Next is that niche. I don’t know what it is but, Barnes & Noble should. Perhaps it’s to position the tablet as the best reader there is with superior software to do this. Sure, it can still provide other typical tablet features in addition but, these should be clear afterthoughts for consumers looking for their tablet to perform a specific function very well rather than today’s jacks of all trades.

Go Bold
The company may even consider being bold about its changes. Perhaps it should steer clear of the Android OS. Maybe it should leverage the Ubuntu OS. A move such as this would certainly draw attention. It would also help move it away from being just another version of an Android tablet.

Whatever path it takes, the moves now must be bold and they should start with a spin-off of the tablet as a separately-run entity with a clear niche and a clearly strategic differentiation over other tablets. It’s the only way it can stand apart successfully from the Kindle.